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Wednesday, 3 May 2017

(NST) T'ganu's property market seeking shelter from tough times

KUALA TERENGGANU: The property market in Terengganu looks gloomy with the enforcement of tighter regulations for developers, rising construction and land costs, and difficulty faced by prospective homeowners in securing loans.

The current climate bodes ill for the state’s real estate market, which is already weathering a volatile global economy.

Real Estate and Housing Developers Association (Rehda) Terengganu chairman, Mohamad Hishamudin Muda, said the state recorded a lacklustre performance last year.

He said statistics from the National Property Information Centre (Napic) revealed that property sales dropped 6.3 per cent to 19,091 units, accounting for RM2.26 billion in revenue, in 2016.

The figure is still much lower than the sales decline of 11.5 per cent recorded nationwide for the same period, which saw 320,000 units worth RM145 billion sold.

“Although there appears to be good demand, tighter loan requirements and loss of purchasing power have added to a decline in sales.

“Additionally, the costs for compliance, land, labour and construction materials have increased, as they have for supporting equipment.

“And infrastructure is still lacking,” said Hishamudin, director of NPPR Resources Sdn Bhd.

He added that land owners expect their property prices to increase, while buyers want cheaper homes.

“I urge the state and federal authorities to review the property development policies which do not favour developers, contractors, buyers, sellers and investors.

“The policies are against the purported intention to allow the rakyat to own affordable homes,” he said.

Hishamudin warned that there could be severe repercussions from a chain effect on supplementary industries, should the property development industry itself collapse.

“A positive growth in the property development industry will spur job opportunities and improve the socio-economic welfare of the people,” he said.

He added that residential properties priced below RM250,000 in Terengganu recorded encouraging sales last year, whereas those in the RM250,000 to RM500,000 bracket are facing difficulty.

“But the inability to secure bank loans, a lack of purchasing power and the spiralling effects of the Goods and Services Tax (GST) has put a damper on sales.

“Developers are also required to comply with strict state government housing policies which do not help improve Terengganu’s overall property market performance.

“We expect the property market for the residential, commercial and industrial sectors to remain subdued and continue to experience a slowdown, with recovery towards year’s end,” he said.

Nevertheless, Hishamudin said there is potential in the low-to-medium residential segment to meet current housing needs.

“Napic’s statistics also show that the residential sub-sector remains the leading market, with a 65.3 per cent share.

“12,461 transactions worth RM1.54 billion were recorded last year – a decline of 4.6 per cent in volume and 12.5 per cent in value,” added Hishamudin.